Bitcoin Value Increases after Brexit Vote

Bitcoin legitimacy increased when its value saw a 10% boost after Brexit, even as the value of currencies and global equities fell. According to Blockchain CEO Peter Smith, Bitcoin has turned out to be more stable than regular currencies despite its volatility. He told “The Rundown” of the old CNBC: “If you had allocated assets into bitcoin five of the last six years, you would’ve done better than your local currency.”

Bitcoin Stable after Brexit

Smith further said “Bitcoin, right now, is more stable from a volatility perspective than both the euro and the pound, which is a great thing for bitcoin and maybe an indictment of the euro and the pound.”

The value of the pound has fallen by 10% against the US dollar ever since voters decided in favour of leaving the European Union (EU). Meanwhile, the value of the euro has reduced by 3 percent.

According to Smith, the user base of Bitcoin is substantial as millions of people use the cryptocurrency every month. He said: “For any kind of alternative to the banking system to have attracted millions of users, that hasn’t happened since PayPal.” The process could be accelerated by the fact that international banks such as UBS and Santander are holding real world trials with blockchain technology to develop cross-border payment solutions. Blockchain functions as an enormous decentralized ledger for bitcoin, storing records of every transaction made along an international network so that nobody can interfere with the process.

Bitcoin Investors Happy

In spite of the fact that the bitcoin price has shot up after Brexit and bitcoin investors are happy, the cryptocurrency has its fair share of critics. Ashvin Bachireddy, partner and co-founder of Geodesic Capital, said: “Bitcoin is effectively becoming digital gold. You can continue to see further validation of bitcoin as something detached from a centralized government that allows people who work to preserve wealth in a secure way.”

However, no bitcoin expert is going to recommend exchanging savings in dollars, euros, and pounds for bitcoins because the cryptocurrency is still volatile. CoinDesk reported on Friday that the value of one bitcoin has shot up by 8.7% to $680.19. This was followed by the Brexit vote and the pound collapsed to its lowest point after 1985.

Bitcoin is still meant only for lion-hearted investors. One bitcoin was worth $430 at the beginning of the year, but the value plummeted to less than $360 in the middle of January. The scenario changed in the middle of June when the bitcoin suddenly became worth $768 only to plunge to $603 after a week.

Steve Waterhouse, partner at Pantera Capital, a bitcoin investment company in San Francisco, is not in favour of replacing traditional currencies with bitcoin.

He is of the opinion that bitcoin is most effective in transactions related to business and makes sense as investments only in countries where the economy is really very bad, such as Spain, Argentina, and Greece.

Not all share these opinions as evident by the fact that bitcoin to euro trading after June 10 has increased fivefold.